Capitol Hill Hospital v. District of Columbia State Health Planning & Development Agency

600 A.2d 793, 1991 D.C. App. LEXIS 313, 1991 WL 247722
CourtDistrict of Columbia Court of Appeals
DecidedNovember 20, 1991
Docket91-43, 91-102
StatusPublished
Cited by20 cases

This text of 600 A.2d 793 (Capitol Hill Hospital v. District of Columbia State Health Planning & Development Agency) is published on Counsel Stack Legal Research, covering District of Columbia Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Capitol Hill Hospital v. District of Columbia State Health Planning & Development Agency, 600 A.2d 793, 1991 D.C. App. LEXIS 313, 1991 WL 247722 (D.C. 1991).

Opinions

FERREN, Associate Judge:

Medlantic Healthcare Group and Capitol Hill Hospital (collectively the Hospital) appeal from two trial court orders. The first (Case I) granted a preliminary injunction, sought by the Coalition to Save Capitol Hill Hospital (Coalition), ordering the District of Columbia State Health Planning and Development Agency (SHPDA or the Agency) to require the Hospital to apply for and obtain a Certificate of Need (CON or Certificate) before terminating acute inpatient services.1 The second order (Case II) denied the Hospital's motion for a preliminary injunction to prevent SHPDA from enforcing the Certificate requirements against the Hospital. In Case II the Hospital sought relief designed to countermand the Case I order. We hold the trial court lacked subject matter jurisdiction in both instances. Accordingly, we vacate the December 18, 1990 (Case I) order granting the Coalition’s requested preliminary injunction and affirm the February 4, 1991 (Case II) order denying the Hospital’s requested preliminary injunction.2

I.

The Hospital is an acute care facility located in Northeast Washington. It has [795]*795served the community for over one hundred years and is licensed to provide 234 medical/surgical beds and 16 intensive care/coronary care beds. In 1989, its emergency room served approximately 27,-000 patients. In the fiscal year that ended in June 1990, the Hospital lost over $5 million after a loss of $1.5 million in fiscal year 1988 and a loss of almost $1 million in fiscal year 1989. The Hospital estimates that in fiscal 1991 it will lose approximately $13 million. According to the Hospital these losses are attributable, “in significant part, to the Hospital’s consistent inability to receive compensation for nearly half, or more, of the value of the medical care services it provides.” As a result of these losses, Medlantic Healthcare Group, an owner and operator of the Hospital since 1982, decided to eliminate the acute inpatient services and to convert the Hospital to a facility for long-term care and short-term psychiatric services.

On October 11, 1990, the Hospital sent SHPDA a letter of intent to apply for a Certificate to permit a realignment of services. Attached to this letter was a copy of a notice that appeared in the Washington Post on October 11,1990.3 In its letter, the Hospital described its plan as a “realignment of services,” to be “implemented in phases,” to create non-acute, long-term care and short-term psychiatric services at the Hospital while consolidating all acute inpatient services at the Washington Hospital Center.4 Also on October 11, the Hospital sent notices to its employees, to their collective bargaining representatives, and to all physicians with whom it had service contracts saying that the notified employees and physicians would to be laid off permanently on or about December 19, 1990.5

On October 19, 1990, the Hospital sent SHPDA a second, “replacement” letter of intent in response to “recent discussions” with the Agency’s staff. This letter “reflect[ed] a clarification of timing and regulatory procedures” and noted the Hospital’s intention to seek two separate Certificates to proceed with the conversion.6 The letter indicated that the two stages of the application should be viewed as “a single initiative designed to address community need and financial viability” of the Hospital and the Washington Hospital Center. At the end of the letter, the Hospital added: “regardless of the outcome of this Certificate of Need, the acute inpatient services at CHH will cease operation on or about January 17, 1991.”

[796]*796After further discussions with SHPDA officials, the Hospital sent the Agency a third letter on October 26, 1990:

In [the October 19, 1990] letter we also notified the SHPDA that the acute inpatient services at CHH would be closed on or about January 17, 1991. As that Letter states, it is our intention to terminate those services and obtain a Certificate of Need to convert the hospital building to other uses, but the acute care services will be terminated even if the requested Certificate of Need to do so is not granted. No capital expenditures are required for the closing, but only for the conversion of the building into other uses, for which a Certificate of Need will be requested.

D.C.Code § 32-303(f) (1988) requires a Certificate of Need to close a health service if — and only if — the closing “involves a capital expenditure in any amount.” Because of the magnitude of the proposed closing, therefore, SHPDA asked the Hospital to supply an affidavit verifying that no capital expenditure would be needed to close the acute inpatient services. The Hospital sent the affidavit. SHPDA also called the Hospital to determine whether the closing would affect the Hospital’s federal (Hill-Burton) loan obligations. While the trial court did not permit Director Graham to disclose her conversation with the officials because of hearsay objections, Graham did testify that she was “satisfied” the closing did not involve capital expenditures. Convinced that the proposed closing would be altogether separate from the conversion project, SHPDA declared in either late October or early November that the closing itself would not require a Certificate.7

After learning of the Hospital’s intentions, the Coalition8 hand-delivered letters on October 16, 1990 to the Mayor and to Carolyn Graham, SHPDA Director, detailing alleged violations of the Hospital’s outstanding Certificate (of April 20, 1990) and requesting that they revoke the Hospital’s April 1990 Certificate. Having received no response, the Coalition petitioned SHPDA on October 23, asking for enforcement action against the Hospital because of continuing Certificate violations.9 Again, the Coalition received no response. On November 5, the Coalition filed a complaint in Superior Court for equitable relief against the Mayor, SHPDA, and Graham (Case I) without joining the Hospital as a party. In the meantime, three days earlier, the Hospital had filed its formal application with SHPDA for two Certificates of Need for its anticipated conversion.

Judge Moore denied the Coalition’s motion for a temporary restraining order. Judge Kessler held a preliminary injunction hearing on December 12 and 13, and, on December 18, she issued a preliminary injunction ordering SHPDA to require the Hospital to obtain a Certificate of Need before closing acute inpatient services.

[T]he closing of medical surgical services at [the Hospital] is a substantial change in service involving a capital expenditure[.] [SHPDA is] enjoined pending the final disposition of this matter on the merits under D.C.Code 32-303 to require that the Medlantic Health Care Group apply for and obtain a certificate of need [797]*797before terminating such services at [the Hospital].

Contrary to SHPDA’s earlier ruling, the judge concluded that the closing, like the conversion, was part of the Hospital’s announced “single initiative” to reorganize the Hospital and the Washington Hospital Center at a cost of $10 million dollars.

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Bluebook (online)
600 A.2d 793, 1991 D.C. App. LEXIS 313, 1991 WL 247722, Counsel Stack Legal Research, https://law.counselstack.com/opinion/capitol-hill-hospital-v-district-of-columbia-state-health-planning-dc-1991.